Settlement Agreement Solicitors in London
Independent legal advice on your settlement agreement — fast, clear and usually paid for by your employer. Offices in High Holborn and Upton Park.
A settlement agreement is only legally binding if you have received independent legal advice before you sign it — and in most cases your employer pays for that advice. Adam Bernard Solicitors’ employment team reviews settlement agreements for employees across London, explains exactly which rights you are giving up, and negotiates better terms where the offer falls short.
Settlement agreements often arrive with a deadline of a few days. We can usually review your agreement within 24–48 hours of receiving it. Call 0207 100 2525 (24/7) or book a free consultation at our High Holborn or Upton Park office, or by Zoom, Teams, WhatsApp or Skype.
What is a settlement agreement?
A settlement agreement is a legally binding contract in which an employee agrees not to bring employment claims against their employer, usually in return for a payment and other agreed terms. Settlement agreements used to be called compromise agreements.
Employment law does not normally let you sign away your statutory rights. A settlement agreement is the exception, but only if it meets the conditions in section 203 of the Employment Rights Act 1996. The agreement must:
- be in writing
- relate to the particular complaints or proceedings being settled
- confirm that you have received advice from a named, independent adviser on its terms and effect, particularly on your ability to bring an Employment Tribunal claim
- confirm that the adviser holds professional indemnity insurance
- state that these statutory conditions are met
If any of these are missing, the agreement may not stop you bringing a claim.
Employers commonly offer settlement agreements when:
- your employment is ending, by redundancy, a negotiated exit or dismissal
- a grievance, disciplinary or performance process has broken down
- you have raised or could raise a claim such as unfair dismissal or discrimination
- the employer wants a clean, confidential exit
What does a settlement agreement usually include?
Every agreement is different, but most cover:
| Clause | What it means for you |
|---|---|
| Termination date | When your employment ends |
| Compensation payment | A lump sum in exchange for waiving claims. Up to £30,000 may be tax-free (see below) |
| Notice pay | Whether you work your notice, take garden leave or receive pay in lieu. Notice pay is taxable |
| Holiday pay and outstanding salary | Contractual sums you are owed anyway, taxed as normal |
| Waiver of claims | The list of claims you are giving up. This is the clause to check most carefully |
| Confidentiality | Restrictions on discussing the agreement or the reasons for leaving |
| Agreed reference | Wording your employer will give future employers |
| Restrictive covenants | Limits on working for competitors or contacting clients |
| Legal fees contribution | The amount your employer pays towards your advice |
Our solicitors check every clause against your circumstances and explain what each one means in practice.
Do I need a solicitor to sign a settlement agreement?
Yes. Under section 203 of the Employment Rights Act 1996, a settlement agreement is not valid unless you have received advice from a relevant independent adviser — usually a solicitor — on its terms and effect. Your solicitor then signs a certificate confirming the advice was given.
The requirement protects you: you cannot give up valuable rights without understanding them. It also protects your employer, because an agreement signed without advice may not be enforceable.
Who pays for settlement agreement advice?
In most cases your employer contributes towards your legal fees, and the amount is written into the agreement. For a standard review and sign-off, the contribution usually covers our fee in full, so most employees pay nothing.
If your situation calls for longer negotiation, for example a potential discrimination or whistleblowing claim, we will agree any extra cost with you in writing before doing the work. You can see our approach to costs on our fees page.
Is a settlement agreement payment tax-free?
Under section 401 of the Income Tax (Earnings and Pensions) Act 2003, the first £30,000 of a genuine termination payment, such as compensation for loss of employment, can be paid free of income tax. Anything above £30,000 is taxed.
The £30,000 exemption does not cover:
- salary, bonus or commission you have already earned
- holiday pay
- notice pay, including payment in lieu of notice. Since 6 April 2018 this has been taxable as “post-employment notice pay” (HMRC guidance EIM13874)
Statutory redundancy pay counts towards the £30,000 threshold (HMRC guidance EIM13505). We check that your employer has split the payments correctly so you aren’t taxed more than you should be.
Can I negotiate a settlement agreement?
Yes. The first offer is rarely the final offer, and how much you can negotiate depends on how strong a claim you could bring if you refused to sign. We assess that claim before advising you to accept, counter-offer or walk away.
Terms we regularly improve include:
- a higher compensation payment
- tax-efficient structuring of the payment
- better wording on the agreed reference
- narrower or removed restrictive covenants
- extended health insurance, car or other benefits
- an earlier exit date so you can start a new job sooner
- an agreed announcement to colleagues
Discussions about a settlement are usually “protected conversations” under section 111A of the Employment Rights Act 1996. This means they generally cannot be used as evidence in an ordinary unfair dismissal claim. The protection does not apply to discrimination or automatically unfair dismissal claims, or where the employer has behaved improperly.
How the 2026–2027 employment law changes affect your settlement
The Employment Rights Act 2025 is shifting the balance of negotiation in employees’ favour. According to the Government’s implementation timeline:
| Change | Date | Why it matters for your settlement |
|---|---|---|
| Time limit for most Employment Tribunal claims extended from 3 months to 6 months | 1 October 2026 | You have more time to negotiate before a claim deadline. Acas early conciliation is still required first |
| Qualifying service for ordinary unfair dismissal cut from 2 years to 6 months | Dismissals from 1 January 2027 | Employees with 6+ months’ service gain unfair dismissal rights, which strengthens their position |
| Cap on the unfair dismissal compensatory award removed (currently the lower of £123,543 or 52 weeks’ gross pay) | January 2027 | A stronger claim can be worth much more, so the settlement value rises with it (Government unfair dismissal factsheet) |
| Confidentiality clauses that stop workers speaking about harassment or discrimination made void | Expected 2027 | NDAs in settlement agreements will be restricted (GOV.UK NDA consultation) |
Even now, no confidentiality clause can stop you making a protected disclosure (whistleblowing) under section 43J of the Employment Rights Act 1996. If you think you have a whistleblowing claim, tell us before you sign.
How Adam Bernard Solicitors can help
Our employment solicitors will:
- Review the agreement in full and explain every clause in plain English
- Value any potential claims, such as unfair dismissal, discrimination, unpaid wages or redundancy pay, so you know what you would be giving up
- Check the tax treatment of every payment
- Negotiate improved terms directly with your employer or their solicitors
- Sign the adviser’s certificate that makes the agreement legally binding
Adam Bernard Solicitors is regulated by the Solicitors Regulation Authority. We have served more than 15,000 clients over 15 years from our offices in High Holborn (Central London) and Upton Park (East London).
If you’d rather not settle, we can advise on Acas early conciliation and Employment Tribunal claims. Employers can see our Employment Tribunal defence and redundancy services.
Speak to a settlement agreement solicitor today — call 0207 100 2525 or book a free consultation.
Frequently Asked Questions
How long do I have to consider a settlement agreement?
The law sets no fixed period, but the Acas Code of Practice on Settlement Agreements says employees should normally get at least 10 calendar days to consider the proposed terms and take independent advice. If your employer has given you less, we can ask for more time.
Can I be forced to sign a settlement agreement?
No. Signing is voluntary. If you refuse, your employer has to follow a fair process for any dismissal, redundancy or disciplinary action. Using undue pressure, such as threatening dismissal before any proper process has started, can count as "improper behaviour" under section 111A, which removes the confidentiality protection over those discussions.
Will a settlement agreement affect my benefits?
It can. If you claim Universal Credit, savings and capital over £6,000 reduce your award, and over £16,000 you are usually not eligible (GOV.UK: Universal Credit eligibility). A lump-sum settlement may push you over these limits, so we take this into account when advising on timing and structure.
Is a settlement agreement payment tax-free?
Up to £30,000 of a genuine compensation payment can be tax-free under section 401 of the Income Tax (Earnings and Pensions) Act 2003. Notice pay, holiday pay and salary you are owed are taxed as normal.
Can I bring a claim after signing a settlement agreement?
Generally no, for the claims listed in the agreement. You keep the right to bring personal injury claims you weren't aware of, to claim accrued pension rights, and to enforce the agreement itself if your employer doesn't pay.
What if my employer won't pay my legal fees?
Most employers do contribute, because the agreement isn't binding without independent advice. If no contribution is offered, we can usually negotiate one as part of the deal.
Can I get settlement agreement advice remotely?
Yes. Most of our settlement agreement work is done by email, phone or video call, and the adviser's certificate can be signed electronically, so you don't need to visit our London offices.
This page is for general information only and does not constitute legal advice.
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